Strict government censorship demands Chinese tech companies struggle abroad – The Diplomat

The strength of China | Economy | East Asia

The latest WPS Office scandal highlights the difficulties faced by Chinese tech companies.

When using word processing software, users look for reliability and privacy protection. WPS Office users from China-based Kingsoft have cause for concern on both fronts following the recent public outcry.

Earlier last month, a Chinese writer raised concerns about a privacy breach regarding WPS Office, a word processing software that stores files in the cloud. The author accused the Chinese company of “spying” and deleting locally stored content, saying it was blocked from a draft of her novel due to supposedly illegal content. After initially denying the allegationsKingsoft later released another embarrassing statement citing Chinese Cyber ​​Security Law and defending the company’s decision to censor the content of the document.

In its latest communications, Kingsoft acknowledged that it has the ability to access documents and remove sensitive content, but declined to provide any details about any censorship actions. On the same day the statement was released, Kingsoft also announced a plan to permanently remove ads from the free version of the WPS package. by the end of 2023. Experts Consider this bold move as a decisive step for Kingsoft to win back the trust of users in the midst of a public relations crisis.

The company’s bizarre crisis management strategy exposed the predicament Kingsoft faces, sandwiched between its public relations and its relationship with the government.

Founded in 1989, WPS Office has become an alternative to Microsoft Office Suite in China. Struggling with political risks and a large user base in China, WPS has achieved significant results with its office software. In 2021, Kingsoft made a profit of CNY 1.04 billion from its WPS package. From the company’s point of view, the latest worries about censorship could rob it of potential billions of dollars in profits.

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But Kingsoft has limited damage control capabilities. The company’s latest statement refers to China’s cybersecurity law, implying that Kingsoft has no choice but to follow the Chinese government to enforce censorship. At the same time, it is unprofitable for Kingsoft to publicly raise this critical demand, since talking about an elephant in the room will cause significant damage to the business in China. Users are unhappy with the prospect of their personal documents being read and censored.

Invasion of privacy against users alarmingly common among Chinese tech companies. Popular internet products such as WeChat as well as tik tak (known in China as Douyin) was previously flagged by researchers and the media due to surveillance and privacy concerns. And these data and privacy issues are occurring both inside and outside of China. In jurisdictions such as the US and Canada, questions about these apps are being raised state institutions as well as military.

Apps and software such as WeChat, TikTok and WPS Office based in China often face direct orders from the Chinese authorities to carry out political censorship and information disclosure. However, this political and governmental influence does not stop when companies like Tencent, Bytedance or Kingsoft expand their business overseas. Despite having commercial structures outside of China and engaging in non-political interactions with new stakeholders in other jurisdictions, Chinese technology companies continue to face pressure from the Chinese government to make their products subject to Chinese laws and local jurisdiction regulations.

For Chinese companies seeking to dominate the global market, the fight to comply with Chinese laws, no matter where they operate, is becoming a problem that threatens to cause irreversible damage. TikTok, one of the most successful global mobile apps owned by a Chinese company, continues to face questions about its suspicious data and privacy practices, intensified by the geopolitical infighting between China and democracies. TikTok previously survived Trump’s 2020 executive ban, but the app is now facing questions from outside Senate Intelligence Committee and US Federal Communications Commission on espionage.

While the company vehemently denies any wrongdoing, data from Bytedance and other similar tech companies does not show positive signs of its US business prospects. All Chinese companies caught between political and regulatory struggles have limited tools to deal with these issues.